Affordability of quality early childhood education and care

Thomas Seagrave

Abstract

The cost of early childhood education and care is a highly visible issue in Australia and many other parts of the world. The Australian media discusses it regularly and government policy and inquiries often seek to address it. Despite the attention on the financial details, the issue itself is not restricted to cost alone but rather a combination of cost, quality and availability of services. After all price could arguably be reduced significantly at the expense of quality by abolition of regulations, child to educator ratios and fair work laws. It is unlikely however that many would find this an adequate solution. Some explanations for this reduced availability of affordable, quality education and care include high educator pay and increased regulation through the National Quality Framework. This paper argues that much of this issue of affordability of quality early childhood education and care stems from the marketisation and the growth of for-profit services.

Introduction

Throughout the world early childhood (EC) centres are providing education and care for young children while parents engage in paid work. In Australia provision of education and care is by not-for-profit organisations or for-profit EC centres. The not-for-profit organisations include community-based centre management; local or state government centre management; and independent schools. The for-profit organisations include, for example, G8 Education (2018) which operates centres in Australia and Singapore and was floated on the Australian Stock Exchange in 2007. G8 Education (2018) aims to be the largest provider of EC centres within Australia. Prior to the uprise of G8 Education, ABC Learning was the largest provider of EC centres in Australia (Kruger, 2014). ABC Learning commenced in Australia in 1988, and owned EC centres in Australia, United Kingdom, United States of America, and New Zealand before going into receivership in 2008 (Kruger, 2014).

Affordability and quality

EC centres’ main costs in their day to day running are wages for the EC educators. Australia has regulatory staff to child ratios (ACECQA, 2018b) based on the premise of provision of health, safety and education for the children in care. For example, in rooms with children aged from six weeks to two years one staff member per four children is required; for two to three-year olds, the ratio is one staff member for five children; and for children aged three to five years one staff member for 11 children is required. Ibis World (2018) provides advice for share investors and have indicated that opportunities for investing in EC centres relate to the increasing engagement in paid work by mothers; while a threat to investing in EC centres relates to the staff to child ratio requirement. To make a profit there needs to be compliance with these government regulations while also ensuring effective cost control and taking advantage of the governments’ child care subsidy funding (Ibis World, 2018). Income for EC centres is in the form of fees from families, and government subsidy.

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